Direct Price Negotiation Could Save Money Under Medicare Prescription Drug Benefit, Study Finds

The U.S. could save $20 billion annually if Congress passes legislation (S 3) that would permit the federal government to directly negotiate prices for the Medicare prescription drug benefit, according to a report released Tuesday by the Institute for America's Future, the North Jersey Herald News reports. Similar legislation was approved by the House (Henry, North Jersey Herald News, 4/18). However, Senate Democrats on Wednesday failed to obtain the 60 votes needed to limit debate on legislation. Senate Majority Leader Harry Reid (D-Nev.) voted against cloture after it became clear that it would fail. Voting against cloture and making a floor motion to reconsider allows Reid to bring the bill back for another vote in the future (Kaiser Daily Health Policy Report, 4/19). IAF, a coalition of activists and policy analysts, urged Congress to pass the legislation, which would allow the federal government to negotiate bulk purchases directly with drug makers rather than allowing private companies to set drug prices. Dean Baker, a co-author of the study from the Center for Economic and Policy Research, said, "What we're looking at is how to save money on the program." He added, "It's part of our campaign to fix the Part D disaster" (Henry, North Jersey Herald News, 4/18).

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